Dubai’s real estate market is attracting many ex-pats and foreign nationals who are willing to buy property in Dubai. Since 2002, the government of Dubai has made it easier for overseas buyers to invest in any kind of property.
People can invest money in freehold areas of leasehold areas easily. There’s an abundance of properties ranging from apartments, villas, townhouses, and commercial shops available for sale.
Like all other cities in the UAE, Dubai depends on its oil industry to earn revenue and follow a no-tax policy to attract investments from overseas buyers and renowned companies who can enrich their economy further.
The tax-free status of the Dubai property market has played a key role in attracting foreign investors. All the residential properties in Dubai are tax-free since the launch of a Value Added Tax in the UAE in 2018.
If you consider property tax rates in the world’s largest cities, you will notice that Dubai is one of the cheapest cities for real estate investments.
Compared to other cities, such as Chicago & California where property taxes are 10% of the total value to Sao Paulo where property taxes are as high as 30% of the total value, Dubai is the best playground for foreign buyers.
Another perk is that rental yields in Dubai are reaching as high as 8% which promises good returns on the purchased properties. In this article, we’re going to explain important details about the Dubai property market and how you can go ahead with property investment in Dubai if you are a foreign national. So, let’s read further to know.
What is the condition of the Dubai Property Market?
In the last few years, the Property Market in Dubai has witnessed a series of ups and downs, but now things are becoming good. The prices of properties are rising for the first time in 6 years as demand is increasing, said Morgan Stanley in his research note.
The demand for residential properties is picking up faster than expected and seeing a 1.2% rise in their value. This is because of government reforms in the last 12 months, attractive mortgage loans, and a shift in demand after COVID-19. The market is recovering from the effects of the pandemic and recovering. However, this will take at least 12- 24 months but people are already willing to opt for property investment.
Can Foreigners Purchase Property in Dubai?
Yes! After the changes made in property laws by the regulatory body in 2002, foreigners can buy, sell, or rent properties in Dubai taking no special permissions.
The foreigners must have a valid passport, however, having a residency status is unnecessary. The buyers can choose to search for the right property directly by connecting with the developers. Alternatively, they can connect with property experts to get proper guidance throughout the process and complete the formalities easily.
What are the steps for Buying a Property in Dubai?
If you want to purchase property in Dubai, there are some steps involved. You can follow these to buy all off-plan properties, freehold properties, and resale properties. So, let’s see how you can fulfill your dream of owning property in Dubai.
1. Find out the type of property you want to buy
Foreign investors prefer to purchase properties, such as villas, apartments, townhouses, plots of land, or commercial spaces that are located in well-known and secure areas.
They want leisure facilities in and around, for example, tennis courts, gyms, swimming pools, golf courts, malls, and more. Similarly, you need to determine which type of property is the ideal choice for you when you want to invest your money.
2. Search Property Online
As for any property, the best place is to search online. There are several real estate agencies that list a range of properties on their portal. You can explore the ones in your preferred locations. The listed properties are both newly constructed and available for resale. Developers may also sell properties that are still under construction.
3. Contact Real Estate Agents
If you need help with your property search and can’t decide the right choice for you, you can talk to real estate agents in Dubai. They have expert knowledge about the real estate market in Dubai and can give you better financial advice.
They can help you explore a range of options and invest in properties that have high value and ensure promising returns. Also, they are experienced in dealing with foreign buyers so they can understand your needs better. All this will help you make an informed decision. However, make sure they are registered under the regulatory body for Dubai- Real Estate Regulatory Agency (RERA).
4. Meet Eligibility Criteria
Since the new property law launched in 2002, it has become easy for foreigners to buy and rent property in Dubai. However, you need to have a passport to prove your identity to the government. You don’t need to take any residency permits to buy the property unless you have an intention of staying there for a certain time.
If you want to visit Dubai to investigate things before you invest your money, then you need a visa. The UAE government offers a six months visa, called the “Property Holders Visa”. However, to qualify for this, you must be an individual, not an organization, and buy property under a certain value.
5. Determine Financial Requirements
To buy property in Dubai, you must ensure that you have sufficient funds to invest and meet all the costs that are involved in the purchasing. The expenses include the deposit, transfer fees, real estate agent fees, legal advisor fees, and more. Employing a lawyer isn’t necessary but recommended to get help with all the paperwork and legal formalities.
6. Get a Mortgage or Home Loan
It can be difficult to obtain a mortgage in Dubai for purchasing a property. Self-certification mortgages are not offered to the buyers and the amount of paperwork can be too much.
However, you can get a loan from a financial institution as per the local laws by taking the help of a financial advisor. After obtaining the loan, you need to pay it back in monthly installments. Usually, the mortgages are raised for 15 to 25 years in the Dubai Property Market.
7. Pay the Deposit
After finalizing the property and getting the loan, you are required to pay the deposit. The amount will be mentioned in a form and it is usually between 5% and 15% of the property value. Developers do not drive sales and purchase agreements until you pay this deposit. While buying an off-plan property, make sure that the payments you make are forwarded to a RERA- approved securities account. It is the real estate regulatory agency in Dubai that takes care of all the real estate investments. These payments are later transferred to the developer when the development of the property is completed.
8. Sign the Agreement
You need to sign the formal and legally binding sales and purchase agreement. The contract must include the purchase price and the date by which the property under construction will be completed, and what are the penalties that the developer will incur if the property is not handed over to the client on time. You can hire a local lawyer to check the contract for you along with all the details and basic terms and conditions.
9. Transfer the Deeds
To get everything done, you need to transfer the deeds. here you need to pay 100% of the purchase value of the property in Dubai. Until you transfer the deeds, you can’t own the property, so make sure to arrange the financing beforehand. You can inspect the property by visiting it to point out any issues that the developer should consider before finalizing the development.
Finding the Right Property Advisory Firm
The real estate market of Dubai is different from other countries so it is recommended to hire a real estate advisory firm that can guide you throughout the property buying process.
Allegiance is one of the reputed real estate advisory firms in Dubai that specializes in offering properties to investors in the most sought-after areas of Dubai. They offer an exclusive range of villas, apartments, plots, etc in Dubai that are ideal for foreign nationals. They can help you buy property in Dubai which could be either under development or available for resale. You can check out the ideal options as per your interests and book any one of your choices by simply paying an initial deposit or down payment to them.